While the recent initiatives to expand the dYdX Grants Programme (DGP) are laudable, it’s evident that we must aim even higher to unlock its full potential.
Being proponents of decentralisation and autonomy, our collective aspiration should be to shape the DGP into an efficient model of excellence capable of acting as a blueprint for future programmes within the dYdX ecosystem.
At the heart of our vision is enforcing stringent accountability among grantors. We suggest creating a comprehensive platform designed to enhance transparency, streamline monitoring, and foster continuous performance improvement. It’s high time we build a DGP that truly embodies the principles of decentralisation, autonomy, and unrelenting accountability.
Here are some points that we feel must be reconsidered:
Applications
We propose establishing an application procedure via an official dYdX governance/grants platform. This approach would ensure all applications and their corresponding outcomes are publicly accessible, fostering an environment of transparency and accountability. To further enhance accountability, we recommend implementing a maximum seven-day period for decision-making on applications.
Moreover, incorporating community voting on applications and enabling feedback on each application’s perceived value through polling can be invaluable. Such an approach would harness our community’s collective intelligence for better cost assessment—addressing a crucial concern with the current program.
Given the time it may take to build such a platform, we suggest initially using Discourse to facilitate this process. A prototype of how this might look and function can be found here.
Communications
All interactions between grantees and grantors should be made public to bolster transparency, unless the grantee specifically requests to keep it private. This ensures timely responses, promotes professionalism and efficiency in their dealings, and gives the community a transparent evaluation of the grantors’ conduct. These measures would be essential for electors when considering future candidates for the DGP, underlining the vital role of accountability. We suggest using Discourse for these communications, below the grantee’s applications, as mentioned above, until an in-house solution is available.
Funding Split
The current proposal for a 10/90 funding split between strategic and community initiatives doesn’t sufficiently account for the high costs commonly associated with technical development, particularly in the domains of tooling and analytics. For example, based on our experience, the creation of an advanced trading journal accommodating the community’s requests for v4 could demand up to $150k in funding, substantially depleting the community bucket. Once we incorporate other essential analytics tools into the equation, the current funding provision appears starkly inadequate. While Reverie has demonstrated competence, there may be a gap in appreciating the true financial demands of these complex tooling projects. In response to this concern, we propose a community poll to collectively determine a more suitable funding split that genuinely aligns with the financial needs of these projects. The poll could offer options like 10/90, 20/80, 30/70 or 40/60, facilitating a democratic approach to funding allocation. Given the financial realities we’ve outlined, we’re inclined to recommend a 30/70 split as a more practical and sustainable solution.
Grantors
We recognise Reverie’s dedication and achievements, but we firmly believe that a decentralised approach is necessary for the DGP’s continued success. No matter how competent, a system dependent on a single entity inherently lacks diverse perspectives and may inadvertently favour certain biases. This approach is inconsistent with the decentralised ethos that should define our ecosystem.
It’s critical to realise that the current model, relying on Reverie as the sole decision-maker, presents a highly concentrated structure prone to various risks, including bias, misjudgment, and single points of failure. Decentralisation minimises these risks by pooling diverse perspectives, facilitating shared responsibility, and promoting accountability and transparency.
As a more pragmatic and balanced approach, we propose the appointment of three grantors for the Community Bucket and two for the Strategic Initiatives Bucket. Under this framework, every grant application would necessitate majority approval from the respective grantors. This arrangement would enhance the decision-making process, drawing on the grantors’ collective expertise while embedding a system of checks and balances to ensure fairness, transparency, and accountability. The shift to a decentralised model is not just desirable; it’s an essential evolution that aligns with our community’s values and the future we envision for the DGP.
Operator
The role of an Operator, as outlined in the proposal, includes responsibilities that could potentially be automated, such as initiating payment batches, updating transparency dashboards, and publishing monthly reports. However, we suggest a more streamlined approach where grantors manage grantees through the process, casting votes upon project completion. Automated payments could be triggered by successful completion votes, enhancing process efficiency and eliminating the need for manual payment processing. With these adaptations, we question the necessity of the Operator role. If these duties can be effectively managed through automation and active grantor involvement, it may render the Operator role redundant, thereby streamlining the grants process and reducing overhead costs.
Trustees
As we propose expanding the grantor base to five, it’s worth questioning the need for separate trustee approval. If our larger, more diverse set of grantors perform effectively, they could potentially assume the responsibilities of trustees. This approach better aligns with our decentralised model and could simplify the governance process.
Compensation
Under our decentralised approach, we propose the management of the Strategic Initiatives Bucket be assigned to two grantors, each receiving a monthly compensation of $15,000. This ensures a balanced workload, promotes diverse decision-making, and maintains cost efficiency.
Regarding the Community Initiatives Bucket, we recommend allocating $7,000 monthly to our three proposed grantors. The elevated compensation accounts for their extended responsibilities as they’re expected to fulfil the roles of trustees and possibly part of the Operator’s duties, such as managing grantees throughout the process.
Elections
Elections should be a process that reflects the sentiments and needs of the entire community. Therefore, the automatic reconsideration of Alexios’ role should not be taken for granted. Instead, all interested parties should be given an equal opportunity to apply for all three positions within the Community Initiatives Bucket. The most suitable candidates should then be chosen through a voting process conducted by the endorsed delegates. This open and democratic approach should also be applied when selecting the additional grantor for the Strategic Initiatives Bucket. Ensuring that the individuals in these pivotal roles are genuinely representative of and accountable to the community they serve is critical.
Summary and Future Prospects
Our proposed modifications to the dYdX Grants Programme v1.5 are rooted in the ethos of decentralisation and our community’s collective intelligence. A more transparent, accountable, and decentralised model for grants management would significantly enhance the efficiency and impact of the DGP.
The key points of our proposal include:
- Establishing a publicly accessible application procedure to enhance transparency.
- Making all grantee-grantor communications public for accountability.
- Reconsidering the funding split to better align with the financial demands of projects.
- Expanding the number of grantors and decentralising decision-making.
- Automating the role of the Operator and reassigning trustee responsibilities to grantors.
- Revising grantor compensation to reflect their workload and responsibilities.
- Instituting an open election process for grantor positions.
Recognising the potential time constraints and the complexity of these modifications, we propose a gradual implementation process. An initial phase could use existing platforms like Discourse to facilitate application procedures and community engagement. We also offer our willingness to contribute to the product design and development processes if our proposals align with the community’s vision.
In the long term, introducing a mechanism to rotate grantors and a dedicated platform to manage the grants process would solidify the principles of decentralisation, transparency, and accountability in the DGP.
Our suggestions aim to contribute towards a more resilient, inclusive, and efficient DGP. We look forward to seeing how our proposals may shape its evolution and stand ready to support this process.